December 5, 2022 | Monday

“Good governance: public procurement and advanced political-making” – increasing transparency at local governance – Ardit Dragusha

Writes: Ardit Dragusha – Researcher, Democracy+

Public procurement is one of the most important forms of spending public money, through which state contracts, services, and goods work. In Kosovo, only during the year 2021, 9892 different contracts were concluded, the value of which reaches 429 million euros, which is approximately 5.65% of the country’s GDP.

As it is a delicate activity of spending public money, which is often associated with corruption, it is very necessary that this process be professionally supervised in order to guarantee the achievement of value for money, transparency and free competition between private companies.

Within the project “Good governance: public procurement and advanced political-making”, Democracy Plus (D+), funded by the European Union (EU) in Kosovo, has monitored public procurement activities at the local level, with a focus on five (5) large municipalities (Pristina, Prizren, Gjilan/Gnjilane, Peje/Pec, Gjakove/Djakovica), in which more than twenty (20) tenders were monitored.

This monitoring was done by monitoring the procurement activities in these municipalities through the electronic e-procurement platform. Based on some indicators that raise suspicion of corruption, tenders with “red flags” were selected, for which complete documentation was provided through the request for access to public documents and then the same were subjected to a detailed check for potential irregularities.

The one-year monitoring has followed the tenders during all stages of the procurement (pre-tendering, tendering and post-tendering procedures). In the first phase of the pre-tendering, the selections of the tendering procedures and the qualifying criteria of the offers were reviewed. During the second phase, attention was paid to the evaluation of offers and the awarding of contracts, while the tenders were also followed up after the tendering with a special focus on the management of contracts and the realization of payments.

Importance has been given to the use of the negotiated procedure without publication of the contract notice, a procedure that reduces competition and raises doubts about the favoritism of economic operators. This procedure, the use of which is allowed only in emergency cases, began to be applied to a large extent at the beginning of the COVID-19 pandemic, with the contracting authorities concluding “fast” contracts in order to protect the health of citizens.

Although the COVID-19 pandemic is no longer an “emergency situation” where two years have passed since its beginning, some contracting authorities have continued to use the pandemic as a pretext even during 2022, concluding contracts “without competition” and above the market price.

During the analysis of the tenders, some bad practices in determining the qualifying criteria of the offers have been identified, which have resulted in damage to the competition and inappropriate spending of public money. The establishment of these criteria, which usually do not turn out to be relevant to the field of tenders, raise the suspicion that some companies have been favored by the contracting authorities, which have consequently led to the contracting of higher prices.

In parallel, during this time, a comprehensive monitoring has been done for the conclusion of agreements for special services (ASS), otherwise known as “work contracts” by the central and local authorities throughout the year 2022, contracts which also enter public procurement domain.

This monitoring has for the first time identified deficiencies in the legal framework for the connection of Special Service Agreements, which is currently very generalized and leaves room for interpretations. The legal loopholes have resulted in the contracting of incompetent persons in performing the works and responsibilities defined in the tender files.

In addition to monitoring public procurement, D+ has also published several short papers as reactions to public policies. Initially, the Assembly of Kosovo was recommended to set a “ceiling” regarding the travel expenses of the MPs, a topic that had dominated the media headlines after the publication of the MPs’ oil expenses.

As a form of fighting inflation, the Government of Kosovo in June of this year had set the maximum commercial margin of oil profit, also determining the maximum price allowed for the taste of oil. This way of state intervention in the free market economy is analyzed in another short paper, where the concept of the maximum price as a form of price control, the existing legal framework in Kosovo, and the effects that this decision produced in the economy of country.

During this period, the transparency of the ministries was also measured in terms of how much they publish the necessary data for citizens and businesses through their official websites.

The measurement was carried out in fourteen (14) ministries by means of nine (9) indicators determined by a by-law for the websites of public institutions, based on the Law on Access to Public Documents.

In relation to this issue, it has been recommended that each ministry designate a responsible person to update and maintain with notes the official website of the relevant ministry, in cooperation with the Information Society Agency (ISA), within the Ministry of Internal Affairs ( MIA).